Blockchain/AI/IoT | February 20, 2024

These VCs are betting on AI to upskill workers and expand pathways to good jobs

Dennis Price
ImpactAlpha Editor

Dennis Price

The advent of generative artificial intelligence isn’t all doom and gloom for employees. Played right, AI could open pathways to higher-skilled jobs for millions of workers who have been shut out of the middle class.

Artificial intelligence tools that augment human capacities can enable many more people to perform high-skilled jobs. With skilled workers at a premium, venture capitalists see opportunities in technologies that can upskill workers for high-demand jobs. 

Instead of pursuing visions of robotic factories free of humans, these VCs are eyeing investments that can expand economic mobility through education and workforce development. 

Among the opportunities are AI tools that lower the cost of education, widen access to expertise, offer personalized learning, and provide predictive wraparound services for frontline workers, incarcerated youth, people with disabilities and others with barriers to career opportunities.

To dig in on the AI opportunities in education and workforce investing, I’ll lead a discussion at SXSWedu in Austin, An Investor Talk on AI: All-In or All-Hype? The panel, set for Mar. 4, includes Rohan Wadhwa of Lumos Capital Group, Sabari Raja of JFF Ventures and Brian Dixon of Kapor Capital.

Customized training

Fears that AI will render human labor obsolete are giving way to optimism that the technology can expand, rather than constrict, economic mobility.

Generative AI “has the potential to dramatically lower the costs of education, thereby promoting greater access to learning,” says Wadhwa. Lumos is growth-stage venture fund investing that has backed nearly a dozen ed- and workforce tech companies. 

The technology “has the ability to address ethical challenges that already exist in our education and workforce development systems,” he says. “AI is personalizing learning experience-based on individual needs, which can help address many current issues of inequity.”

Lumos led an investment round last year for Mumbai-based Disprz, a learning and development platform. The startup uses AI to customize training for diverse workforces at companies like Thrasio, Amazon and Mint Dentistry.

Learning tech company Quizlet, language app Duolingo, and tutoring powerhouse Khan Academy have integrated OpenAI’s ChatGPT to bolster their offerings

Boston-based AdeptID uses AI to help companies better unlock the potential of their massive workforces. JFF Ventures backed AdeptID in 2021 (from its predecessor JFF Employment Technologies Fund). JFF has deployed nearly $30 million in dozens of “inclusive workforce” companies.

“Imagine the number of frontline workforce a company like Walmart has. As an employer, they have no idea what the skill sets of these frontline workers are. What are the skills? What is their upward mobility path within Walmart?“ says Raja. “If generative AI can actually help employees like Walmart uncover who these people are at the frontline, it’s a win win for everybody.”

In January, Google adopted the use of the AI tutor from Kapor Capital portfolio company Edlyft, a Black women-led platform that provides students from diverse backgrounds with group tutoring and study groups to learn computer science.

Human expertise

“AI Could Actually Help Rebuild The Middle Class,” is the title of a new essay by MIT labor economist David Autor. Information is a key input for decision-making, Autor explains in the 7,000 word essay in Noema Magazine. Computerization over the last few decades has made information cheap, helping to concentrate decision-making power among elite experts, such as doctors, lawyers and tech engineers.

Autor, who earlier warned of the “China Shock” and the negative impact of US-China trade on US industrial workers, is surprisingly bullish on the power of AI to redress such inequality. 

Artificial intelligence, he says “can weave information and rules with acquired experience to support decision-making,” ultimately enabling “a larger set of workers equipped with necessary foundational training to perform higher-stakes decision-making.”

AI can counteract “the process started by computerization,” says Autor “to extend the relevance, reach and value of human expertise for a larger set of workers.”

In essence, he continues, “AI — used well — can assist with restoring the middle-skill, middle-class heart of the U.S. labor market that has been hollowed out by automation and globalization.”

Polling of educators and workers shows a yearning to incorporate the tech to boost efficiency and expertise. Eight in 10 workers surveyed by Oliver Wyman want training in generative AI, though nearly as many have found training from their companies inadequate. 

Nine in 10 educators also believe AI has the potential to make education more accessible, according to Imagine Learning’s “Educator AI report.” And cheaters will cheat, but Stanford researchers have seen no uptick in student cheating since the arrival of ChatGPT. 

“Employees have adopted the technology so quickly,” says Oliver Wyman’s Ana Kreacic, referring to AI-powered chatbots. “People are moving ahead on the productivity gains, while organizations are basically still in proof-of-concept and pilots.” 

Diverse perspectives

The Google-Edlyft partnership “marks a transformative moment in tech education, using generative AI to support underrepresented students pursuing careers in tech,” Kapor Capital wrote in a post on LinkedIn. Kapor invested in the company in 2020. 

Google and Edlyft have piloted the tutoring program with students at historically Black colleges and universities and Hispanic-serving Institutions.

“Our hope is that every student feels seen when they watch videos of peer tutors who look like them, who’ve been in their shoes explaining complex concepts and answering their questions.” Edlyft’s Erika Hairston told AfroTech.  

Kapor Capital, which says its funds have outperformed by ‘closing gaps’ for communities of color, is “excited about the influence of AI in education,” according to its latest impact report. Still, it warns, “AI is still a human creation and the same biases that plague Silicon Valley can be magnified by its lighting-fast infiltration of tech.”

Homogenous teams building AI algorithms have already “caused long-lasting and unjust effects on the lives of millions of Americans,” including biased hiring algorithms, disparities in health outcomes, and facial recognition tech that criminalizes people of color. Kapor Capital signs a binding agreement with every founder that “ensures that any AI companies we have or will invest in will build with ethical standards at the forefront.”

“Do no harm” is only a start. Investors in education and workforce development say AI-powered tools also have an opportunity to give a boost to low-wage workers most vulnerable to technological advances.  

“We don’t as an investor invest in a company because they’re an AI deep tech company,” says JFF’s Raja. “We invest in a company because AI is enabling this population to achieve clear, measurable economic mobility outcomes.”